Speaking on Specialist Lending Solutions TV in partnership with Castle Trust Bank, Kris Corns, operations director at Crystal Specialist Finance said this was the first financial year that changes to the tax relief would be noticed by investors.
“It’s been talked about since 2015 and it’s been on a sliding scale for a number of years but this 2020-2021 tax year is the first year that it will be at zero. So investors will now start to see that in their tax bill and see that payment going out,” he added.
He said this was backed by data from estate agency Hamptons which found 41,700 buy-to-let limited companies were set up last year. This was a rise of 23 per cent on the year before.
Additionally, Corns said a drop in interest rates for limited company borrowing was encouraging this move, adding: “Maybe five years ago there was a big disparity between an individual and limited company, whereas now there isn’t.”
Anthony Rose, director of LDNfinance, said changes to permitted development rules had also “brought different sorts of investors into play”.
He said this led to investors using their experience in the sector to be more involved with their assets and undergo heavier refurbishments.
“In some ways the tax changes and the permitted development changes that have taken place over the last few years have almost created the new business model that probably wasn’t there a few years ago,” Rose added.
Watch the video below [6.15] featuring Shekina Tuahene, commercial editor of Mortgage Solutions and Specialist Lending Solutions, Robert Oliver, director of sales at Castle Trust Bank, Anthony Rose, director of LDNfinance, Kris Corns, operations director at Crystal Specialist Finance and Richard Merrett, head of strategic development at Simplybiz Mortgages.